Argentina plans South Atlantic oil quest

Jul 01, 2010 02:00 AM

Argentina will start drilling for hydrocarbons in an offshore region close to the South Atlantic waters of the British-controlled Falkland Islands, officials said.
Plans for the start of a $ 150 mm exploration for oil and gas by a group of companies were announced as Buenos Aires said its sovereignty claim over the Falklands had won support of China. There was no independent confirmation of reported Chinese comments that Argentine Foreign Minister Hector Timerman interpreted as Beijing's support for Argentina's claim on the South Atlantic islands, a British overseas territory.

Timerman's appointment in June coincided with a build-up of an Argentine government campaign to garner support for its sovereignty claim and promote the idea the Falklands were under British colonial rule.
Argentina and Britain went to war in 1982 after an Argentina junta invaded the islands. Britain repulsed the attack in a 74-day conflict that cost more than 1,000 lives but Argentina didn't give up its claim. TheFalklanders decided after the war to self-rule as a British overseas territory.

Argentine claims over the islands gained momentum after a British-backed oil prospecting round that resumed last year, after a hiatus of more than a decade, produced encouraging results. The countermove by Argentina to prospect offshore for oil and gas will be led by Argentina's YPF with the participation of Pan American Energy and Brazil's state-run Petrobras.
Unlike the Falklands exploration, which points to significant reserves matching quantities in Saudi Arabia, the Argentine offshore prospecting has yet to produce feasible finds after the drilling of 20 wells over several years. Pan American Energy said earlier it would likely invest a lot more than the $ 150 mm currently allocated to pursue hydrocarbon exploration in the area adjacent to the Falklands.

Analysts said the Argentine announcement, at the same time as Timerman's strident pronouncements of "anachronistic" British presence in the South Atlantic, echoed avigorous campaign orchestrated by President Cristina Fernandez de Kirchner.
Argentina took the Falklands issue to a UN decolonization committee meeting in New York, arguing the British Falklands rule was a vestige of colonialism. Further Argentine action against international companies that trade with the Falklands includes punitive sanctions designed to isolate the Falklands.

China was cited in earlier reports as among international investors that are interested in acquiring a majority stake in Pan American Energy. Exactly what transpired between the Chinese envoy and the Argentine minister at the United Nations remains unclear. Timerman told he was approached by the Chinese representative at the UN Committee on Decolonization.
"The UN Chinese representative approached me to express strong support on the Malvinas sovereignty claim and reinforce the friendship between both countries," Timerman said, using the Argentine name for the Falklands.

He lamented that what he saw as a key diplomatic victory was ignored by the Argentine media. The press in Buenos Aires wants the government to answer more pressing questions on domestic politics and economy. Some critics have dismissed the government's Falklands diplomatic fight as populist and designed to deflect attention from pressing domestic issues in Argentina.
"I thought it was disrespectful, considering everything that happened at the UN As years go by, more and more countries support Argentina's claim over the Malvinas," Timerman said.

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